Home Equity Loan

I have never applied for a home equity loan. Do you know anything about it?

I have a Chase credit card, and they have always kept their word and I applied for a fixed home equity line of credit for 4 yrs. The fixed rate is 7.8%. I am not sure if that is good or not Should I apply at more than 1 bank? Will other banks, loan companies possibly give me a better fixed rate? My home is paid for. My dad sold it to me for $1 before his death. I only want a fixed rate, not adjustable and asking for $11, 000. for the roof and tuck pointing the chimney and fixing some vents up there. I desperately need a roof since the house is very, very old. The roof is running water all over the floor.

Public Comments

1. Shop around but don't apply till you see the best rate. If it is flexible rate check what it is tied to. There are 2 markets that the rates are tied to, I don't know what they off hand but it will state how volatile your rate is. Ask the broker. Not to pry but if you are using a home equity line for your credit card be careful. You can deduct the interest but as prices come down on homes you could find yourself upside down. So don't really recommend it, also with the credit crunch banks have increased scrutiny.
2. A home equity loan is getting a second mortgage on your home. I assume that you have a first morgage that you are paying and that there is equity in the home or you could not get a home equity loan. If it was me I would consider a cash out refinance. Usually a first mortgage has a much lower interest rate than a second mortgage. Talk to someone you trust and not someone at the bank or card company that are trying to sell you to purchase their loan. Hope this help you.
3. The home equity loans fall into two categories. The first type is a term or closed end loan and another is a typically a line of credit. Many people choose to describe them as a second mortgage as they are secured against your home just like your primary home loan. Usually these loans have repayment duration of 5-15 years. The term loan is a one-time lump sum payment that should be repaid over a pre-determined duration. It carries a fixed interest rate that lets you pay the same loan installment every month. Once you get the loan, you cannot take further loan.
4. If you are a first time borrower of a home equity loan it is imperative that you have a checklist of essential questions that you need to ask each and every lender. The answers to these questions will provide a valuable reference to base your comparisons on. What’s the interest rate? Knowing this is crucial. The interest rate will determine<!--the monthly payment you will need to make. You also need to know if the interest rate is of a fixed or adjustable nature. Fixed rate implies that the monthly payments will remain constant, while an adjustable rate implies that rates will fluctuate depending on market conditions. http://best-loans.awardspace.com/homeloans.htm In adjustable rate, when will rates change? If your interest rate on the home equity loan is of the adjustable variety, you need to know three things: when the rate is going to change (that is under what conditions), how frequently will the rate change and what’s the average-->percentage by which the adjustable rate will change. What is the Annual Percentage Rate or APR? The APR on the home equity loan will determine the yearly payment you will need to make towards this.The higher the payment in terms of points, the lower is the interest rate.